Dealing with shoddy property management

Question from Anouska updated on 24th December 2015:

I live in the UK and own a property in New Zealand. My original property managers handed over my property to a new company some years back - with the condition that the original contract would be honoured.

Since then, the property has been poorly managed. There has been a string of poor tenants and incomplete tenancy tribunal applications. As a result, I have lost out on a large sum of money.

The most recent tenants left with most of my furniture and the current chattels list the property manager has does not resemble my original list, so I cannot claim for the missing items.

On the original tenancy agreement, I chose the option for the property manager to take out landlord protection on my behalf. This would cover loss of rent, loss of property, damages, etc. But the property manager refuses to comment on this.

The quotes given for repairs have been double the quotes I have found and a lot of the work organised by the property manager has needed to be redone.

The property manager has also charged me on a number of items (adverts) which were inclusive under the terms of my original agreement.

Do I have grounds to sue?

Our expert Bernard Parker responded:

You have a number of complaints that need to be addressed. The basic question is whether the current property manager is acting in your best interests and according to the contract that you have with that manager.

When your business with the original property manager was handed over to a new company the terms of your original management contract (including your specific instructions) should apply to the new manager. If any instructions or conditions of the contract are to be changed, they must be agreed between you or notified to you by the new manager. In the absence of any change notification or agreement you can reasonably expect the new manager to perform as required under the original management contract.

I am conscious that the management was transferred “some years back”. Since then have you received any notification of changes to the new manager’s Terms of Business?

Also, haven’t you noticed that you have not been paying premiums for landlord protection insurance? Some of your issues may have resulted from an incomplete hand-over of your business from one property manager to another. You will need to establish whether the new manager “dropped the ball” or whether they received incomplete information in the hand-over.

Your property manager must act in your best interest at all times, and is answerable to you for the performance of that obligation. The company cannot be held responsible for the actions of the tenants, but vetting and selection of appropriate tenants is certainly a responsibility that must be carried out thoroughly. So too is the task of recording and monitoring the condition of the property and its chattels at the start of a tenancy, in order to ensure that the property is cared for and returned to you in substantially the same condition.

You say your complaint about the property manager’s failure to take out landlord protection insurance was met with a refusal to comment. What other communication have you had about the other issues that you mention?

If you can’t resolve your issues by communication with the company you may need to make an application to the Disputes Tribunal. Its purpose is to resolve disputes such as you have – by mediation if possible, but with the power to make a ruling if necessary. I suggest you look at www.justice.govt.nz/tribunals/disputes-tribunal for more information about that process.

Bernard is principal of Quinovic – Kapiti-Mana. Quinovic's outstanding people and systems provide the most professional, effective and reliable residential property management service in the NZ market for over 30 years.